Brazilian Government invites major private-sector investment in roads and railways

August 17, 2012

On 15 August the Brazilian Government announced a programme of concession licenses to attract major private-sector investment in the country’s road and rail network. Investment will total R$133bn (US$66bn), more than half of it coming in the next five years.

The Brazilian Government today announced R$133bn (US$66bn) of infrastructure concessions to spur investment in the country’s roads and railways. A stimulus package aimed at ports and airports is to be announced in the near future.The aim is to increase public and private investment in Brazil’s transport infrastructure, increase efficiency and carrying capacity, reduce costs, and further boost the country’s overall competitiveness.Of the R$133bn, R$91bn will be invested in the construction of 12 railways and the remaining R$42 billion in the construction or expansion of nine roads. More than half of the investment is to take place within five years, the remainder over 25 years (see figures below). The Planning and Logistics Company (Empresa de Planejamento e Logística – EPL), created today by the Brazilian Government, will be responsible for planning and monitoring the investment projects. The investment model for railways will consist of public-private partnerships in which the Government will be responsible for contracting the construction work and, subsequently, for maintaining and operating the new track.The concessions for developing the road network will be awarded to the bidder proposing to charge motorists the lowest tolls for using their roads. Companies will only be permitted to charge tolls when 10% of the work on a given project has been completed, and there will be no toll booths in urban areas.

Programme of Investment in Logistics – Roads and RailwaysTotal investment: R$133bnIn next five years: R$79.5bnOver 20 years (roads) or 25 years (railways): R$53.5bn